The Stories That Shaped 2008, No. 9: Governments wrangle with tax revenue slide

City, county and state governments faced tax revenue shortages in 2008, and the problem is not likely to be remedied soon.

In Springfield, sales tax figures for fiscal 2009, which began in July, were at least holding their own through November compared to the previous year.

But the numbers took a nosedive in December; the city is now down nearly 2.6 percent to $19.3 million for the year. The city's budget was based on a 3 percent increase in sales tax revenue.

While city officials are still somewhat optimistic that sales tax numbers could recover before the current fiscal year ends in June, 3 percent growth is unlikely.

City Manager Greg Burris presented four potential budget scenarios for fiscal 2010 during Springfield City Council's Dec. 16 luncheon, and the best-case scenarios estimated annual sales tax revenue growth of 2 percent in 2008-09 and 2009-10.

Greene County, meanwhile, is nearing the end of its fiscal year, which matches the calendar year, and general sales tax revenue is down 3.3 percent for 2008, cutting into the general revenue fund by nearly $400,000.

To pull even with 2007, when the county brought in $23.7 million, the county's final sales tax collection for the current fiscal year would have to be up nearly 40 percent from a year ago.

Greene County also has seen a $200,000 decline in county recorder's office fees and $100,000 in building and planning services as a result of slowdowns in building and real estate transactions, according to county Budget Officer Jeff Reinold.

To make up for the shortage, Reinold said the county did not give a budgeted salary increase to employees, saving about $600,000.

Reinold said his "crystal ball is a little fuzzy right now," making it hard to anticipate what 2009 will bring, though he did say county staffers already are discussing its options should sales tax revenues continue to fall short.

He added that budget projections for next year, though not complete, will be based on more conservative predictions for tax revenue.

At the state level, Missouri's latest revenue collection figures show year-to-date general revenue figures through November down 3.9 percent from last year.

That announcement was followed in early December by Gov.-elect Jay Nixon's statement that a re-evaluation of the state budget for this fiscal year, which started in July, shows the expected $281 million surplus has turned into a projected $340 million shortfall due to lackluster collections.

State budget watchdog Missouri Budget Project is predicting a shortage of nearly $900 million in fiscal 2010, prompting a statewide series of presentations in early December spelling out the budget crisis.

During the Dec. 3 presentation in Springfield, MBP Executive Director Amy Blouin said the state can't depend on cutting spending in the long term to make up the difference, as Missouri is near the bottom of the list in per capita spending on education and health care, the two largest sources of general revenue expenditures.

"The budget funds the array of things that our communities depend on - social services, transportation, education, economic development, health and so forth," and that government infrastructure depends on strong state revenues and wise investments, Blouin said.

Entities that rely on state funding already are nervous about next year, including Missouri State University, one of several schools looking at ways to trim its budget now in anticipation of reduced state appropriations.[[In-content Ad]]